Miners spend big on shareholders, not projects – The Wall Street Journal
JOHANNESBURG — Mining executives were criticised when billions were poured into new projects pre the Global Financial Crisis, which saw huge amounts in write-offs on overpaid for assets. And now, as executives shift spending from new projects to shareholders via share buybacks and dividends, it seems the knives are reappearing. Stock prices have however behaved favourable but there are concerns that given depletion is a reality in the mining business, not enough is being earmarked for new projects and growth. Increased regulatory scrutiny and resurgence resource nationalism have also played its part in projects in developing countries, while the escalating trade conflict between the United States and China, could stunt commodity demand. With researches predicting only $23.1 billion in spending in 2020, the lowest in at least a decade, shareholders could be in for further buybacks and dividends. – Stuart Lowman
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